The care-wage penalty: the association between family care and wages

Background: Against the background of demographic aging, the need for professional and private care will increase in the future. To contain costs many welfare states rely on the family as care provider and, in addition, people in need of care often prefer being cared for at home. Thus, the number of people who provide care privately and without pay in the home environment (referred to as family care in this article) is likely to increase. So far, however, research on the impact of family care on the labor market situation of caregivers in general and their wages in particular remains scarce. Objective: This article examines whether and if so to what extent, family care affects the wages of women and men. Material and methods: Using data from the German Socio-Economic Panel (2001–2017), fixed effects regressions were estimated separately for women and men, while accounting for important confounders. Results: Both women (2.4%) and men (3%) suffer wage losses as a result of family care activities. Conclusion: The results indicate that care-related wage losses, net of relevant controls, exist.